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• Provide additional application-type information with the request including matters such as
<br />budget, agency information /history, tenant profile, rent levels, etc.
<br />• Identify a specific property to be purchased
<br />• Disposition and securing of HOME funds (i.e., through contract and loan documents)
<br />• Identify the amount of the HOME funds and identify leveraging from other sources.
<br />At the October meeting, staff presented an alternative that was developed after the August
<br />meeting and which involved the potential purchase by HOUSE, Inc., of abelow-market priced
<br />home in the Walnut Hills neighborhood. The home, which initially sold in 2003 for $199,000
<br />with resale restrictions (through the Pleasanton Homeownership Assistance Program, or PHAP),
<br />is currently for sale at a price of $241,985. Staff proposed a draft purchasing finance plan in
<br />which HOUSE, Inc., would provide a down payment of $40,000 in private funds and the City
<br />would provide a deferred loan of $205,000 through its allocation of federal HOME funds. After
<br />considerable discussion, the Commission voted unanimously to approve the concept with a
<br />caveat that HOUSE, Inc., should explore options for leveraging additional funds.
<br />DISCUSSION
<br />Staff met with representatives of HOUSE, Inc., following the October meeting and developed a
<br />modified plan which we feel addresses the concerns expressed by the Commission in August
<br />and October. The primary modification would involve increasing the down payment by
<br />HOUSE, Inc., from $40,000 to $50,000. This would bring the agency's direct contribution to
<br />over 20% of the total financing consistent with conventional preferred lending standards. In
<br />addition, the agency would be responsible for covering any costs of renovating or improving the
<br />property after purchase (e.g., back yard, interior painting, etc.) using its own funds. The
<br />resulting modified financing plan is shown below:
<br />$242,000 Sales price for home (actually $241,985; rounded)
<br />- 50,000 Down payment by HOUSE, Inc. (private funds)
<br />$192,000
<br />+ 3,000 Approximate closing costs /other real estate costs/
<br />$195,000 Proposed loan by City of Pleasanton (HOME funds; deferred)
<br />Staff believes that the modified plan presents a reasonable compromise which increases the
<br />agency's direct financial participation in the transaction.
<br />If the Commission feels that additional leveraging is desirable, HOUSE, Inc., could receive a
<br />$20,000 partially-deferred loan through the City's Down Payment Assistance (DPA) program.
<br />If the Commission supports this use of the DPA program, the $20,000 could either offset the
<br />$50,000 HOUSE, Inc., down payment or the City's $195,000 HOME loan (or a combination of
<br />both) depending upon what the Commission feels is appropriate. The DPA loan would actually
<br />consist of two 10-year loans of $10,000 each spread consecutively over 20 years at 3.5%
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